Gce Model Questions Vol1 2020 Financial Accounting Question 12

Three partners A, B and C share profits in the ratio 3 : 2 : 1. Their partnership has the following assets before a new partner D is admitted: - Cash: \(£20,000\) - Building (cost): \(£80,000\) - The building is revalued upward by \(£12,000\). The partnership's profit for the year before any goodwill or revaluation is \(£45,000\). The partners agree that goodwill of \(£30,000\) will be paid by D and allocated to A, B and C in their old profit‑sharing ratio. The revaluation surplus of the building is also allocated to A, B and C in the same ratio. D will acquire a one‑fifth (\(\frac{1}{5}\)) interest in the partnership's net assets (including the revalued building). Determine the amount that should be credited to D's capital account on admission.